The forthcoming Future Ireland Fund “won’t revolutionise” the Irish economy, National Treasury Management Agency (NTMA) chief economist, David Purdue, has cautioned.

The fund was announced in October 2023, as part of the country’s Budget 2024, alongside an Infrastructure, Climate and Nature Fund by Minister for Finance, Michael McGrath.

Speaking at the Irish Association of Pension Funds (IAPF) Investment Conference 2024 in Dublin yesterday, 13 March, Purdue said: “They are very welcome, but they aren’t transformatory. In the sense that one fund [Future Irish Fund] will get up to about €100bn and the other will get up to €14bn, which sound like large numbers.

“But, if we talk about taking the returns of the Future Ireland Fund in years to come, it might be 2-3 per cent return each year, a few billion euros a year. That is very valuable and helpful, but it doesn’t fundamentally change the fiscal picture for Ireland. It will be a new revenue source in the 2040s but it is not going to revolutionise ourselves.”

The two funds, the Future Ireland Fund and the Infrastructure, Climate and Nature Fund, are still to be established with legislation expected in the summer. Both funds will be managed by the NTMA and Purdue expects the first money could be transferred into the funds in Q3 2024.

McGrath previously said of the Future Ireland Fund: “It will help us to meet the costs of running the state in the future and will make a contribution to the cost of healthcare, pensions, home care and much more. For example, we know we are facing considerable costs in relation to an ageing population, age-related spending will be around €7-8bn higher by the end of this decade than it was at the start of the decade – this is simply the ‘stand-still’ cost.”

Purdue believes the creation of the two funds are a “prudent measure” and the NTMA sees them as “very valuable” as mitigants to economic risks.

“The idea is taking some of those surpluses and saving them and putting them away for a rainy day,” Purdue said.

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